CSR expenditure

[Sanjeev Jain]

Is 80 G deduction allowed on payments made for CSR expenditure if such entities are registered for the purpose of Sec-80G?

[Guest]

No specific tax exemptions have been extended to CSR expenditure per se. Finance Act, 2014 also clarifies that expenditure on CSR does not form part of business expenditure.

Section 80G applies in respect of a DONATION made to a specific fund or institution. One of the condition applicable of allowability of deduction u/s 80G is that the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;

THEREFORE, 80G DEDUCTION IS NOT ALLOWED ON CSR EXPENDITURE MADE.

AI Summary

CSR expenditure not eligible for 80G deduction because donations must meet institutional, recordkeeping and certification requirements. CSR expenditure is not a deductible business expense under income tax rules and Finance Act, 2014. Section 80G allows deduction only for donations to specified funds or institutions that issue certificates and maintain separate books to ensure donations are not used for business purposes; CSR payments do not satisfy these institutional, recordkeeping and certification conditions and thus do not qualify for 80G deduction.